Like many peers who made big bets on large technology companies, White is crushing it in 2017.

His fund, with $4 billion in assets under management, gained 25% this year through Thursday. That’s stronger than the Lipper Multi-Cap Growth Funds Average it’s compared to, and the broader Russell 1000 index he describes as an “imperfect” benchmark.

Stock pickers like White are seeing a turnaround in their fortunes this year. Since the recession, more money has gone to passive strategies and products like exchange-traded funds (ETFs) that are designed to mimic the returns of an existing index.

“The real test for active management is going to be the next bear market,” White told Business Insider.

“We should see all the stocks that went up for reasons that didn’t make sense get obliterated as people sell. And active managers – if they’re as good as they’re supposed to be – should be able to sidestep that more elegantly than ETFs or passive strategies can.”

‘Frustrating’ financials

To ride out the inevitable downturn, one of White’s preferred sectors is financials.

But that’s been a “frustrating” bet this year, he said. It’s not what many fund managers believed just after the 2016 election, when they expected higher interest rates and deregulation to help banks.

“The number one reason why financials have not done what people hoped they would do is because the 10-year Treasury yield has just remained anchored so low,” White said. This has limited the earnings banks make from their net interest margins, or the gap between the interest rates at which they lend and borrow, relative to their assets.

“I’m overweight financials, but I wouldn’t call it a very high-conviction positioning right now,” White said. “I’m hopeful that we’ll get tax reform. If we get tax reform, that would be a significant catalyst for the group. But the last nine months do make you a bit wary of the government can accomplish.”

To its benefit, the current administration was handed an economy in expansion. But the 10-year yield, which peaked this year in March near 2.57%, and the flattening yield curve “might be telling us that there’s trouble around the corner,” White said.

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Sallie Mae is up 51% since the election.

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One financial stock that’s been boosted partly by Washington is Sallie Mae.

The student-loan provider has jumped 51% since election day, in part on the expectation that President Donald Trump’s administration would not overregulate the private-lending market.

“They have the ability to grow their earnings in the vicinity of 20% for the next several years as long as we don’t go into a recession,” White said.

He added that the stock is attractive because it can beef up its assets by adding more loans to its balance sheet.

It also helps that tuition fees at American colleges are among the highest in the world.

“The federal limit on loans has been pretty static but the cost of tuition has gone up,” White said. “So there’s a greater hole each year theoretically that needs to be plugged, and Sallie Mae has a real-high market share in this business.”